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Credit sweeps are an aggressive and rapid option to fix poor credit. In fact, there are many scams that sell a “quick fix” for your credit. This leads to a lot of confusion about the legality of performing credit sweeps yourself or though a third party. As a professional trying to improve your credit, you should be very careful with this decision. Many people fall victim to credit repair scams. If you submit any false or fake information, there could be severe legal consequences. Here are the major warning signs a credit sweep is not legal.
Identity Theft
One of the most common credit sweep scams involves fraudulently claiming that you have been a victim of identity theft. This is because the report entries resulting from the theft can be disputed all at once. However, a police report is needed for this process. Many illegitimate credit companies will go as far as to file false claims and police reports of identity theft because it makes the disputing process so much easier. People tend to fall for this scam because it provides the fastest turnaround for their credit scores. However, filing a false police report is illegal by itself, so you would be committing multiple crimes to file a credit sweep.
The Credit Repair Organizations Act
Many do not realize that the Credit Repair Organizations Act protects consumers from scammers. Legally, credit repair companies cannot ask for payment upfront. Unfortunately, some scam artists disregard the Act, asking for payment before any services are rendered. Moreover, they may not inform you that you have the right to repair your credit yourself. The CROA also prevents credit repair companies from making guarantees. As a result, any company that provides a guarantee is one you should immediately be wary of. If they are already disregarding one aspect of the Act, they are probably disregarding the whole thing. Knowing the CROA and the best credit repair strategies are imperative in spotting credit sweeping scams.
Websites And Promises
Another method of spotting an illegal credit sweep is to pay attention to the professionalism of websites advertising credit sweeps/repair and the claims they make. For example, if words are capitalized and spaced seemingly at random, then that website would seem illegitimate under the lack of effort put into it. Also worth noting is the language used to describe the services offered. Pay attention to how the offers are worded, and if their claims make sense. A good example of what to look out for is if they try to differentiate between two terms that mean the same thing. Finally, use your common sense to determine the feasibility of these claims. Think about whether a professional service achieving results in weeks and saving you hundreds of thousands of dollars in the process seems like a probable reality.
Time Frame
Paying attention to the time frame specified by a credit service is also a great way to spot illegal credit sweep scams. The legitimate process of disputing entries on your report goes back and forth between your credit sweep service and the bureaus. Therefore, it should take months, not weeks. Note that the credit bureaus operate on 30 to 45 day billing cycles, at the end of which credit scores are updated. Think about whether credit sweep/repair services could get results in a shorter time without illegal methods. They cannot. Of course, the repair time frame is dependent on the type and number of items to be disputed, but no legitimate credit service can promise results within 30 days. A more realistic time frame can be anywhere from six weeks to over a year.
Rate of Disputing
A final sign a credit sweep service might be illegitimate is if they are claiming to remove a large portion of your report entries at once. A legitimate credit sweep works by finding any discrepancies on your report and disputing them individually with the bureaus. Examples of discrepancies include old addresses, wrong names, or incorrect phone numbers. The only way to remove everything at once is to make an identity theft claim. This is one of the frauds described above, and even then some good entries might also be removed. If the credit bureaus update individuals’ reports every 30-45 day cycle, then it stands to reason that inaccurate entries would be removed at a similar rate. In short, if the rate of dispute the rate of disputing is high, if they say they can dispute everything at once, they are a fraud.
Credit sweeps can be a great financial tool for mitigating debts, however there are a lot of illegitimate credit sweep entities looking to prey upon unsuspecting victims. The first sign to look out for is any identity theft attacks, as fraudulently claiming yourself as a victim of this crime is part of one of the most common scams. Another sign to look for is a service’s disregard of the Credit Repair Organizations Act. Thirdly, you will want to pay attention to the language and grammar used on websites advertising credit sweep or repair services. Also, pay attention to the time frame given by the service. Finally, think about how much of your credit report the service is claiming to repair at once. Take these five aspects into account, and you’ll be able to spot illegal credit sweep scams from miles away.
